For a small business, the process of obtaining appropriate financing can often be complex and confusing. When commerce is transacted on the international level, however, companies seeking financing can face even more difficult hurdles. A lender - when deciding whether to provide financing to a business preparing to export - must be willing to take greater risks in international transactions and so must look more closely at the creditworthiness of the business and the viability of the proposed export transaction. The presence of additional concerns for lenders makes it particularly important for a business seeking to export to be well equipped with knowledge to navigate the process of financing.

There are typically two elements of exporting which may require financing in order to be successful.

• First, the exporter may need additional working capital in order to produce the good or service intended for export. This could be as simple as expanding or utilizing already existing lines of credit with a bank. However, since the financing is to produce an exportable item that will be repaid only by a foreign buyer, the bank will likely view this as an added risk.
• Second, a foreign buyer may need credit to facilitate the purchase of the export. While the extension of credit or its arrangement by the exporter may increase the risk involved, it does offer a key incentive for the buyer and increases the exporter’s foreign competitiveness.

Nevertheless, in either instance a lender will have to look with greater scrutiny at the buyer’s creditworthiness, as well as the political and economic conditions within the buyer’s country.

U.S. Government Financing Programs

To aid both of these financing needs, the U.S. government provides extensive support for U.S. exporters through a variety of programs. While the specific scope of each of these programs may differ, they all primarily focus on encouraging the facilitation of credit by private lenders rather than direct governmental lending.

The largest of these programs is the U.S. Export-Import Bank (Ex-Im Bank). Servicing all sizes of business this independent governmental agency focuses on lowering the risk to private lenders in financing export transactions. Ex-Im bank provides several fee based services using loan insurance and loan guarantees to encourage private lenders by protecting them against most forms of default, including those brought on by foreign political or economic disruptions.

The Small Business Administration (SBA) also provides services for exporting companies. It offers the Export Working Capital and the International Trade Loan programs. Both of these programs provide loan guarantees for private lenders to aid a business with working capital to facilitate its pre-export needs or export potential.

The Department of Agriculture's Foreign Agricultural Service offers a number of financing programs that provide guarantees on payment for a variety of exported commodities from grains and wood products to livestock, depending upon the Department’s current trade policy. These guarantees are based on a letter of credit obtained by the exporter from the buyer’s chosen bank.

The Overseas Private Investment Corporation is another government program which seeks to facilitate U.S. exporting to developing and emerging nations. It provides political risk insurance and guarantees for private export loans as well as offering direct loans itself, up to $30 million for small and medium sized businesses.